THE THEORY OF INTEREST

preference for early, or prompt, income over late, or de-ferred, income resolves itself into the preference for earlyenjoyment income over deferred enjoyment income. Anyincome item which consists merely of an interaction or,otherwise expressed, of a preparatory service 3 (that is,an item which, while it is income from one species ofcapital, is outgo in respect to another species) is wantedfor the sake of the enjoyment income to which that in-teraction paves the way. The consumer prefers the ser-vice of milling flour in the present to milling flour in thefuture because the enjoyment of the resulting bread isavailable earlier in the one case than in the other. Themanufacturer prefers present weaving to future weav-ing because the earlier the weaving takes place the soonerwill he be able to sell the cloth and realize his enjoymentincome.

To him, early sales are more advantageous than de-ferred sales, not because he desires the cloth to reachits ultimate destination sooner, but because he will thesooner be in a position to make use of the purchase pricefor his own personal uses—the shelter and comforts ofvarious kinds constituting his income.

The manufacturer is conscious of only one step towardthe ultimate goal of clothes—the money he expects to getfor the cloth from the jobber to whom he sells it. Butthis money payment in turn discounts a further step.To the jobber this money he pays is the discounted valueof the money he will receive from the wholesaler, and soon through the retailer, tailor and wearer. The result isthat each is unconsciously discounting, as the ultimatelink in the chain, the enjoyment to be derived by thewearer of the clothes. Of course this is not the whole

' See The Nature oj Capital and Income, Chapter X.

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